FRIDAY, FEB. 26: The Budget is "disappointing" and could lead to job losses, says the Bermuda Chamber of Commerce.
It also claimed Government "has to lead from the front in reducing expenses and maintaining costs".
The Chamber criticised Finance Minister Paula Cox for not providing a detailed enough Budget statement and called on ministers to be held accountable if they do not keep department spending within the Budget line.
Stephen Todd, Chamber president, said: "It is clear the Finance Minister tried to maintain current account expenditure at a reasonable level.
"However, (her statement) is lacking in detail in terms of some of the percentage details.
"It is not clear to us, considering the impact to the man on the street and our Chamber membership, as how that translates into costs and how that impacts our pockets.
"We would like to have a clearer understanding how those increases will impact on the wider community.
"[I question] whether the Government is truly committed to containing the expenditures going into the new 2010-11 current account when their previous history would suggest they have not made maintained the Budget line.
"We have a clear indication of an increase in expenditures but there is no clear indication that each minister is going to be held accountable for maintaining and controlling expenses - to support the statement that no additional expenditures are going to be permitted.
"Government has to be seriously committed to maintaining expenditures. They should be regularly reporting what they spend. We want to see some accountability.
"If we have to reduce our expenses and maintain our costs, Government has to lead from the front."
Mr. Todd said the positive aspects of the Budget were "minimal".
He added: "Taxi drivers will receive some concessions. It has been implied the retail division will receive some assistance but what has been referred to as support for retailers is in fact concessions that are already in place. We're not seeing a lot of new incentives."
Peter Everson, past president of the Chamber, said the payroll tax increase from 14 to 16 per cent is a bad move.
He added: "At a minimum, it will cost every employer one per cent more on their labour costs.
"This is at a time when the international business survey, released this week, said the key concern for executives and CEOs was the cost of doing business in Bermuda.
"This is a straightforward increase on the cost of doing business in Bermuda, which will drive business out of Bermuda.
"It's counterproductive to new jobs arriving and may later move jobs overseas."
Mr. Everson said that for many international companies - especially those in hedge funds, investment management or fund administration - salaries and wages are a large part of their overheads.
He added: "This is a direct increase to their costs".
"There is nothing new in this Budget that we have not seen in the last five to 10 years.
"What it says is that Government is living beyond its means. It is not raising adequate revenue year by year.
"All that is doing is storing up trouble for the future. It means that future years of taxpayers will be paying off the debt that we incurred over the last eight years."
Mr. Everson said Government estimates its debt to be $973 million for 2010-11.
But he added: "In their recent history, with revenues less than expected and expenses more than expected, we can rightly assume that number will be more than $1 billion.
"That would be hard cash borrowed from overseas for services we have already consumed over the last eight years."
Kristi Grayston, head of the Chamber's retail sector, also said was little to be cheerful about in the Budget.
She added: "We're pretty disappointed with this. We were being charged 33 per cent for electronics but people could bring them in through the airport at 25 per cent.
"Residents got a better import rate than retailers did. This corrects that but that wasn't really what we were asking for.
"We were hoping the Minister would level the playing field a little bit and give us the ammunition to compete with overseas shopping and Internet shopping. It's very disappointing."
Ms Grayston believes the hike in payroll tax will further hamper struggling retailers.
She added: "We can't pass that on to consumers. People are shopping in stores with their BlackBerry and they can do price researching right there.
"Just for the record, all is not well on Reid Street."
Posted: Wednesday, March 17, 2010
Comment by:
Edmund
Dizzy - 1/ They should change suppliers so they do get at least the price individuals are obtaining. Purchase from the same online retailers if you have to. Why continue to purchase from a supplier when it is clear there are less expensive alternatives for the same product? 2/ I recommend they reduce the store front space and increase their product line by online sales as outlined in my previous post. 3/ I never said I was a retailer or desired to be one. I offered my suggestions, as a consumer, of how retailers could make their store more appealing to me - the person they would like to purchase from them. 4/ Fine words but if you don't have what I want (or at least something close to it) at a price I'm willing to pay for it then I'll find what I want at the price I'm willing to pay for it elsewhere. Also, if I purchase the pleated and cuffed pants that I don't want then how will you learn to start stocking flat-front non-cuffed pants that I do want? I'm not going to buy pants I don't like simply because you decided they were the only pants you would stock and no Buy Bermuda sticker is going to alter that behaviour.
Posted: Monday, March 08, 2010
Comment by:
Dizzy
Edmund - I fully support your right to shop on the internet, I do it myself occaisionally, if it is something I really want and have tried to get it here first. I would like to make a couple of small points.
1/ local retailers are not getting a cheaper purchase price than the place in the US you are buying from.
2/ They are probably paying at least twice the hourly rate for their staff, and are probably paying 3x the SF rent.
3/ If you are such a good retailer, why don't YOU open a shop and bring in all those things that apparently are lacking with the existing retailers.
4/ We are all in this boat together. If we don't support each other, no one else will. (Amazon certainly won't.)
Posted: Sunday, March 07, 2010
Comment by:
Stephen
things are Bad CD&P have let 3 Bermudians go from the IT Dept times have changed
Posted: Saturday, February 27, 2010
Comment by:
Edmund
I must say that I have very mixed feelings when retailers start crying foul on import duties and their prices on Reid Street or any other street. As mentioned in the close of the article I do price comparisons of items on shelves to items on the internet. What I regularly find is that I can bring in two of the same item (sometimes a more recent version than what is on the shelf) for the price of one item on the self. This is taking into account international shipping and duties. I ask myself, "Self, if I can land one item at 50% of the shelf price why buy off the shelf"? Retailers are purchasing more than one of the item and so are getting a cheaper bulk price. Retailers' shipping cost per item is lower as they ship by container and most often pay for volume. I ship by sea at times but most times by air and so I am paying higher shipping cost per item than retailers. Then we both pay duty. So, why is it that retailers' prices are so uncompetitive? Why are they twice as expensive as my individual higher item price and higher shipping cost?
I only buy off the shelf if the price is within 30% of my own landing cost but this percentage decreases with the increase in my landed cost.
Instead of whining about customers purchasing from overseas retailers, local retailers should be looking to adapt to the new market conditions. No longer can they bring in tons of the same item and sell it at unreasonable prices.
For example a retailer on Reid Street brings in tons of pleated and cuffed men's dress pants. That's it. No other option for nice dress pants in the entire store. No flat front non-cuffed pants unless you want the crap ones that fade at the pockets as soon as you put your keys in them. So I buy my pants online and while I'm there I see some shirts so get those and hey, why not get some socks while I'm at it. That retailer looses out on more than the pants sales because I'll get other items I need/want while I'm enjoying the shopping experience with the internet retailer.
Another example. A Reid Street retailer is selling MP3 FM broadcasters so you can listen to your MP3 player in your car over the radio. They actually have version 2 of a certain brand but I can land version 3 for 50% of the shelf price of the version 2 they are selling. So again, I turn to the internet and while there, since I'm already saving 50% off the shelf price I might pick up a new headset or wireless mouse while I'm at it. That retailer looses out on more than the item I was initially interested in as well.
Buy Bermuda? Are you kidding me? In general, the majority in my experience are over priced and/or lack variety
So what is the solution? My suggestion is that you reduce your store space and extend your hours. With less store space you need less staff to manage it and pay less for floor space. Instead of releasing the surplus staff extend the hours of operation; turn them into an early shift and a late shift. The reapportion your floor space with a higher portion of items that move fast and increase the variety of these items. For the remaining space of slow movers show a small selection of display items. Keep these slow movers at your warehouse and let people purchase and you deliver to their Hamilton job address same day from the warehouse or they collect it from the store that afternoon/next-morning. Most importantly, get a website where people can get every item related to your stores category. Show them the landed price (be competitive with an individual landed price, maybe add some processing charge on that) and a delivery target of two-three weeks. People are already accustomed to wait this long, sometimes longer, for internet purchases. Additionally, they don't have to deal with the Post Office or Customs or whomever as you're taking care of all that. Finally, put a few terminals locked to your site in the store so people can see your complete collection. I'd make these stand up terminals and not allow general internet access on them.
Retailers, you have to adapt your model. It is clear it is not working so adapt or become extinct. Such is the way of Capitalism.
Posted: Friday, February 26, 2010
Comment by:
Dizzy
Craig - THANK YOU!!!!!
I have been saying this for years. I was told at a Chamber of Commerce meeting that this wasn't feasible. Of course it is. There is already a different import duty structure for stuff that comes in at the airport in your baggage, or that comes in at the Post Office or by courier.
I would go one step further, and say that if I, as a retailer, sell clothes, and I bring in a sofa for myself in my clothing container, I should pay the higher duty. Ditto if a furniture retailer brings in a fridge.
Yes, I like to occaisionally shop overseas, but I prefer to shop in Bermuda. I certainly wouldn't go away on a shopping spree. I am a Bermudian, I employ Bermudians, and we are having a very hard time. If you want me to be able to pay my taxes to keep Bermudian kids in Government school ("free" education), then Mrs. Cox - help me out, help me to be more competitive with the USA.
Posted: Friday, February 26, 2010
Comment by:
Craig Clark
There needs to be reform of the duty structure so that retailers that employ Bermudians pay a LOWER rate than residents pay at the airport or for goods imported via ZIPX. The best way to accomplish this would be to keep the retailer's duty rates the same but raise the rates for residents personally importing their own goods. This would help keep Bermudians employed and somewhat level the playing field when comparing local prices to those of huge US chains.
